The Law and Economics
Birmingham students notice the impact of his economic education, but particularly in his approach to contracts and damage measures. The first systematic statement of the efficiency of expectation damages to appear in the legal literature was that of Professor Birmingham, in his article Breach of Contract, Damage Measures, and Economic Efficiency, 24 Rutgers L. Rev. 273 (1970). Illustrative is Birmingham's following statement in that piece: "Although choice among Pareto optimal states requires appeal to subjective values, the superiority of at least one such state over any given state outside the set may be defended as almost tautological." Since that time, contract scholarship has increasingly adopted economic perspectives. In the abstract for Damage Measure and Economic Rationality: The Geometry of Contract Law, Birmingham writes "The question of damage measures presented by the conscious decision of a promisor to breach a losing contract raises one of the most perplexing conceptual problems in contract law. Recognizing the present inability of the courts rationally to resolve the problem, as illustrated by the opposing decisions in Groves v. John Wunder Company and Peevyhouse v. Garland Coal and Mining Company, the author undertakes to examine the premises of contract law with a fresh perspective-economic analysis." It is precisely this "fresh perspective" of "economic analysis" that pervades and infuses much of this legal theory and is one of his biggest contributions to the legal world. At the same time, however, one would be wise not to overlook Birmingham's further remarks, now issuing some twenty years after Breach of Contract, Damage Measures, and Economic Efficiency: "Scholarship about contracts suffers too, however, under our hypothetical hegemony of economics. There are no more revolutions for us, no new paradigms. Starting with our single rule, we practice Kuhnian normal science, writing successive articles showing that rule X, rule Y, etc. of contract law are efficient. This practice is useful and necessary but unheroic; our physics-envy is of Newton not of some anonymous technician."
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